The toxicology of post-crisis shadow banking

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On August 8, 2007, around $1.2 trillion was outstanding in asset-backed commercial paper (ABCP) in the US, worth around 8% of GDP that year. Investors holding the paper were about to step off a cliff. Word spread rapidly of the problems associated with the junk mortgages underpinning the market, and investors, who were able to access their funds on demand at par value, fled. Within a week, the market contracted by $30 billion, and by the end of the month, $190 billion.

ABCP programmes demanded

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